A. Rapoport et al., ULTIMATUMS IN 2-PERSON BARGAINING WITH ONE-SIDED UNCERTAINTY - DEMANDGAMES, Journal of economic behavior & organization, 30(2), 1996, pp. 173-196
The demand game is a noncooperative two-person ultimatum game with one
-sided uncertainty in which the Sender knows the value of the shared s
urplus (pie) but the Receiver only knows its probability distribution
(Mitzkewitz and Nagel, 1993). We study experimentally the effects of s
ystematic changes in the variability of the pie distribution on the Se
nder's proposals and Receiver's (binary) responses. In accordance with
a behavioral theory that we propose, we find that (i) the Sender's pr
oportional share of the pie increases as the Receiver's uncertainty ab
out the pie increases, and (ii) for a given pie distribution, the Send
er's proportional share decreases as the actual pie size increases.